Probate And Trust Property Facing Foreclosure...

Sometimes a family is faced with a Probate or Trust home that is in the predicament of foreclosure. Sometimes when someone passes away, they were unable to continue their monthly mortgage payments in the months leading up to the time they passed. Other times, the Deceased had taken out a reverse mortgage prior to their passing. Especially with Probate properties, the family of the Deceased often decides that between the problem of foreclosure and the cost of Probate to just let the property be foreclosed on and revert back to the lender or bank. In these particular situations, The Probate Source can be of great help and assistance. It is very important for our clients to know and understand first and foremost, THERE ARE NO OUT OF POCKET COSTS TO YOU when using our services to help you with a solution to Probate and the foreclosure. The Probate Source has the ability to conduct the Probate matter for you through the Court and to find a solution for you to the foreclosure issue with NO OUT OF POCKET COSTS TO YOU. Our very reasonable fees only are paid upon a successful resolution of the foreclosure process for you, and they are normally paid by the property lender, bank, or buyer of the home or property. If we cannot successfully resolve the foreclosure and Probate issue for you, then you pay nothing. There are many potential solutions to your Probate and/or Trust property foreclosure issue. Below are some of the solutions we have available:


Solution: Description:
Assistance Programs to Reinstate the Existing Loan: There are some non-profit programs that will assist with getting the existing loan reinstated. If you can qualify for the program, the program will assisst you with getting the amount of money that the home is behind on in late payments with the lender. This is known as reinstatement of the loan. Once this is done, then the foreclosure process is cancelled, and if you can continue making the regular monthly payments, the home will not be lost to foreclosure. This will provide the Decedent's family and heirs to the Estate enough time to either get the home on the market for sale during the Probate process and retain the equity value of the home, or a way for the family or heirs to keep the home and retain it as a personal residence. There are no guarantees that the family or heirs to the Estate will qualify for a reinstatement program, but this is an avenue that may be available. The Probate Source will assist you with finding out if you can qualify for such a program, and at NO OUT OF POCKET COSTS TO YOU.
Assistance Programs to Help the Family and/or Heirs Purchase the Probate Home: Again, there are certain programs that can help the family or heirs to the Estate actually purchase the home. The Probate Source will get the Estate probated so that you can be in a postiion to purchase the home through one of these programs. If you can qualify for such a program, they provide 100% financing (no down payment required), interest rates at below market rates, and these programs ARE NOT BASED ON YOUR CREDIT RATING! This is an ideal way for a family or heir(s) to the Estate that want to try and keep the home as their own personal residence. Again, you must meet certain qualifications, but if you can, this can be an excellent program to allow you to purchase the home. The Probate Source again will work with you, Probate the Estate to put you in a postion to be able to purchase the home, and work with these programs with you at NO OUT OF POCKET COSTS TO YOU.
Conduct the Probate and Sell The Probate Home: If the family and/or heirs to the Estate have some equity in the Probate home and simply want to sell the home to realize that equity, then The Probate Source will get the Probate done to put you into a position to sell the home, and work closely with the lender to forestall the foreclosure process to allow time for the Probate and sale to take place. Again the Probate Source can do this completely with NO OUT OF POCKET COSTS TO YOU. Our very reasonable fees are paid directly from escrow when the sale of the home occurs. If for some reason the home does not sell, or things don't work out, you owe the Probate Source nothing.
Conduct the Probate and Short Sell The Probate Home: Sometimes, the Probate home just doesn't have any real equity. Sometimes more is owed on the home than it is worth. The home is what we call "upside down" in value. Many people throw up their hands at that point, and decide to just live in the home for as long as they can until the foreclosure process happens and they're forced to move out. However there is still even a solution in this situation. The Probate Source can Probate the home as normal, and work with the lender and negotiate a short sale on the home. This can have 2 advantages for the family and/or heirs, especially if they are still living in the Probate home. Short sale processes often take longer, sometimes much longer, than a normal real estate sale. We work with the lender to forestall the foreclosure process to allow enough time to get the short sale process done. What this means is that quite often the family and/or heirs living in the home will be able to live in the home for much longer than they otherwise would have if the foreclosure process moved forward in its normal manner. In addition, we are often (but not always) able to negotiate with the lender to provide some sort of relocation or "cash for keys" money for the family/heirs still living in the home. This can translage into $2,000 to $10,000 depending on the lender and the situation. Of course there is no guarentee that the lender will pay out this relocation money, but we have had good success with it in past such situations. As usual, remember that THERE ARE NO OUT OF POCKET COSTS TO YOU for any of these services.
Recover the Foreclosure Sale Overage Amount for the Estate: If all else fails, and none of the options above are workable, there is one last resort. Sometimes there is what we call an "overage" from the foreclosure Trustee sale of the home. For example if the home foreclosued on had a balance of say $150,000 on the existing loan, and the home sold at the foreclosure auction for $185,000, then there was a $35,000 overage. This $35,000 can be recovered and brought back into the Estate for the heirs or beneficiaries. It takes time, paperwork, and persistance to retrieve that overage, but The Probate Source has a lot of experience in situations like that and has had great success in recovering these funds for the Estate heirs.

Common Questions About Probate And Trust Homes In Foreclosure:

  • When a home goes into Probate, that stops the foreclosure, right?
    (Ans: Most definitely not! Probate DOES NOT stop the foreclosure process. A home in Probate can be foreclosed on the same as any other home. Once a home enters into the foreclosure process, whether in Probate or not, it is CRITICAL that you take action quickly. Each day you delay in taking action, the odds of being able to solve the foreclosure problem decline dramatically. TIME IS OF THE ESSENCE when a home is in foreclosure!)
  • A foreclosure is costly for a lender or bank to go through, right?
    (Ans: In general yes, but lenders and banks are no dummies. If the home has a relatively low loan balance as compared to the actual value of the home, banks and lenders may rather let the home go to a foreclosure auction and sale since they know they'll get all there money that way. Never assume the bank or lender is going to bend over backwards to stop the foreclosure process. This is another reason why you want to move quickly to find a solution to your foreclosure issue. Never wait until the last minute as it decreases your chances for a successfull solution tremendously.)
  • The Probate Attorney will take care of stopping the foreclosure process, right??
    (Ans: I wouldn't count on that. Unless your Probate Attorney has specifically contracted with you to work on the foreclosure issue in addition to the Probate, you may find that no one is doing anything on the foreclosure end of things, and before you know it, the home has been foreclosed on. If you use a Probate Attorney and the Probate home is in foreclosure, BE SURE that you choose a Probate Attorney who has experience with foreclosure real property sales and issues. Most do not.)
  • If the Probate home is foreclosed on, our credit will be ruined, right?
    (Ans: No. Under normal circumstances, the heirs or beneficiaries of the Probate Estate ARE NOT personally responsible for the Decedent's debts and obligations. The Estate itself is, but not the heirs/beneficiaries. However you need to be careful to make sure that all debts of the Decedent have been taken care of before any monies have been distributed. Otherwise then the heirs or benefiaires may be on the hook for returning some or all of their received inheritance in order to pay those debts of the Decedent.)
  • How much does the Probate Source charge up front?
    (Ans: Absolutely nothing. The Probate Source WILL NEVER CHARGE YOU ANY UP FRONT FEES for any of our services. We simply don't operate like that. You only pay our fee if we are successful in completing our service for you. Quite often our fee is paid entirely from the proceeds of the Probate home sale, or the lender, bank, or buyer pays our fee. You should NEVER, EVER pay any company or individual any service fee(s) up front for Probate and/or foreclosure related services. If someone is trying to get you to do that, RUN!)
  • If there is little to no equity in the Probate home, why should I try to save if from foreclosure?
    (Ans: There are in general two good reasons to avoid letting the Probate home go into foreclosure when there is little or no equity. In those cases, the home is almost always sold be way of short sale. Short sales can take a while to complete. During that time period, you can continue to live in the home rent free. Under normal foreclosures, you may get 90 to 120 days of living in the home rent free before the home is sold at a foreclosure sale. However when you successfully negotiate a short sale with the lender, that time usually will increase. You could end up living in the home for 6 to 12 months rent free. Translate that into real dollars and depending on what rents go for in that area, that can be the equivilent of receiving anywhere from $6,000 to $24,000 in free money. The other good reason to not let the foreclosure go through in these situations is that often times, the lender will pay you what is called "relocation" or "cash for keys" money. This can be anywhere from $2,000 to $10,000 that the lender will pay you to help you move and relocate once the short sale has been completed. So between the extended time you receive free rent and the posibility of relocation money, it makes sense to attempt a short sale on a Probate home in foreclosure that has little to no equity.)
  • What if I want to keep the Probate home in foreclosure?
    (Ans: Depending on your circumstances, we may be able to get what is known as "reinstating the loan" done. We have helped many clients and families who want to keep the home by getting the home through Probate and getting the loan reinstated. To reinstate the loan, you'll need to come up with the past due amount after communicating with the lender. If you can do that, then the foreclosure process will stop. This will give us time to get the home through the Probate process, and once that occurs, the heir(s) or beneficiary(ies) can then look to refinance the old loan in the name of the Decedent into a new loan in their name(s). The Probate Source has helped many clients accomplish this.)
  • What if a family member wants to buy the Probate home from the Estate?
    (Ans: This can be done very easily once the Probate process has been started and reached a certain point. The Probate Source can assist the family member with obtaining financing as well, and then with the purchase of the home from the Probate Estate. If the family member happens to be low income, and/or have less than steller credit, there are programs that we use which can often work for that family member and help them to make the purchase.)

© The Probate Source 2019, William C. Hayman - Licensed & Bonded California Legal Document Assistant, Placer County Registration #16-004. NewVision Realty Group, 951 Reserve Drive, Ste 140, Roseville, CA 95678, California BRE #02000748. I (William C. Hayman) am not an attorney. I can only provide self help services at your specific direction.